Key Takeaways ZTS shares slump YTD as safety issues with Librela and Solensia cause sales declines and guidance cuts.FDA reviews and new analyses highlight higher adverse events in Librela-treated dogs versus other OA drugs.ZTS leans on parasiticides, dermatology and new long-acting OA therapies to support a potential 2026 rebound.Shares of Zoetis (ZTS) have plunged 24.8% year to date, amid mounting safety concerns surrounding its monoclonal antibody osteoarthritis (OA)pain therapies — Librela for dogs and ...

Core Thesis - Zoetis Inc. is positioned as a dominant player in the growing animal health industry, benefiting from the trend of pet humanization as households increasingly prioritize pet care over traditional child-rearing [2][5] Financial Performance - The company has demonstrated strong financial performance with high single-digit revenue growth, margin expansion, and a double-digit EPS CAGR over the past six years [3] - Zoetis maintains a robust balance sheet characterized by solid liquidity, low leverage, and steadily growing retained earnings, alongside consistent free cash flow generation [3] Market Segments - While growth has moderated in the OA Pain franchise, both the companion animal and livestock segments continue to perform well, with management indicating stabilization in the OA Pain business [4] - Short-term headwinds, such as slowing vet visits, are not expected to significantly impact long-term demand for pet care products [4] Valuation and Investment Case - Projecting operating cash flow growth at 5% and CAPEX growth at 7% leads to a five-year free cash flow to the firm CAGR of approximately 4% [4] - Applying a 30x exit FCF multiple suggests a five-year IRR of around 14%, indicating an attractive risk/reward profile for investors [5] - The combination of resilient growth, industry leadership, and strong financial health supports a compelling long-term investment case for Zoetis [5] Recent Developments - Despite a 22.17% depreciation in stock price since previous coverage, the bullish thesis remains intact due to the company's strong financials and emphasis on pet humanization [6]

Summary of Conference Call Company Overview - The conference call involved **Zoetis**, a company specializing in animal health and life sciences tools, with key speakers including CEO Kristin Peck and CFO Wetteny Joseph [1][2]. Key Industry Insights - **R&D Efficiency**: Zoetis has a highly efficient R&D process, starting with target species, leading to faster development times and lower costs compared to human health. This efficiency is attributed to the use of AI, genetics, diagnostics, and biomarker data [2][3]. - **Pipeline Strength**: The company has a robust pipeline with 12 blockbuster products expected to launch over the next four years, each projected to generate at least $100 million in revenue. Notable upcoming products include a long-acting Cytopoint in 2026 and renal CKD treatments in 2027 [4][5]. Product Launches and Market Opportunities - **Chronic Kidney Disease (CKD)**: The CKD market is valued at $3-$4 billion, with significant unmet medical needs for both dogs and cats. Zoetis plans to launch seven assets targeting this condition, including therapeutic and diagnostic products [6][7]. - **Librella**: The product is stabilizing in the U.S. market, with expectations for gradual growth starting in 2026. Over 75% of pet owners report high satisfaction with the product [10][11]. - **Market Expansion**: Zoetis is entering new markets with blockbuster products, particularly in CKD and oncology, which together represent over $5 billion in addressable market [5][40]. Competitive Landscape - **Market Dynamics**: The company anticipates heightened competition in 2026, particularly in the derm market, but remains confident in its differentiated product offerings [27][30]. - **Product Differentiation**: Librella is expected to differentiate itself by offering a longer-lasting treatment option compared to competitors, which could expand the market significantly [13][15]. Financial Guidance and Performance - **Guidance Adjustments**: Zoetis lowered its guidance for Q3 due to a decline in therapeutic visits and underperformance of Librella. The company had anticipated slower growth in the second half of the year due to competitive launches [25][26]. - **Long-term Growth Drivers**: The company aims to grow above market rates, driven by a strong core portfolio and a robust pipeline of new products. The focus remains on expanding in the derm, parasiticide, and pain management markets [39][40]. Strategic Focus - **Capital Allocation**: Zoetis emphasizes reinvesting in the business and maintaining a strong balance sheet while considering share buybacks as part of its capital allocation strategy [46][47]. - **Market Trends**: The aging pet population and increased medicalization globally present significant growth opportunities for Zoetis, allowing the company to leverage its extensive portfolio [44][45]. Conclusion - Zoetis is positioned for growth with a strong pipeline, efficient R&D processes, and a focus on addressing unmet medical needs in the animal health market. The company remains optimistic about its future despite current market challenges and competitive pressures [48][49].

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PresentationKristin PeckCEO & Director Good morning, everyone, and welcome to our Innovation Webcast. It's truly an exciting time for animal health. Across our industry, we're seeing remarkable advances in science and technology, along with a growing appreciation for the essential role animals play in our lives and communities. The pace of innovation is accelerating. And with it, our ability to make a meaningful impact is greater than ever. And at Zoetis, we're proud to be leading the way. Our teams are dr ...

Zoetis (NYSE:ZTS) Update / Briefing December 02, 2025 08:30 AM ET Company ParticipantsKristin Peck - CEORob Polzer - President of R&DKevin Esch - Senior VPWetteny Joseph - CFOKristin PeckGood morning, everyone, and welcome to our Innovation Webcast. It's truly an exciting time for animal health. Across our industry, we're seeing remarkable advances in science and technology, along with a growing appreciation for the essential role animals play in our lives and communities. The pace of innovation is accelera ...

Dec 2, 2025 7:30 AM Eastern Standard Time Zoetis Highlights R&D Leadership and Long-Term Growth Opportunity at Innovation Webcast Share Underscores Proven Innovation Model, Robust and Diversified Pipeline with 12 Potential Blockbuster Candidates, and Unmatched Scale and Capabilities Animal Health Leader Positioned to Deliver Sustained Revenue Growth, Profitability and Shareholder Value PARSIPPANY, N.J.--(BUSINESS WIRE)--Zoetis Inc.(NYSE: ZTS), the world's leading animal health company, will host an Innovati ...

These companies' prospects are better than recent performances may suggest.Recent developments have led to significant declines in the stock prices of Pinterest (PINS +2.15%) and Zoetis (ZTS +0.38%). Due to company-specific issues, both are currently not that far from their 52-week lows. The good news, though, is that Pinterest and Zoetis may be able to recover from their recent woes and deliver strong returns over the long run, which would make them steals at current levels.Let's examine why these companie ...

Core Viewpoint - Zoetis Inc. has received marketing authorization from the European Commission for Lenivia® (izenivetmab), a new antibody therapy aimed at reducing pain associated with osteoarthritis in dogs [1] Company Summary - Lenivia is designed to alleviate osteoarthritis pain in dogs for a duration of three months with a single injection [1] - The therapy utilizes novel binding properties to nerve growth factor (NGF), which is recognized as a significant mediator of pain and inflammation [1] - The development of Lenivia is based on over a decade of research [1]

Core Insights - Zoetis Inc. is a leading company in animal health with a market capitalization of approximately $53.8 billion, involved in the discovery, development, manufacturing, and commercialization of various animal health products [1]. Company Overview - The company operates direct marketing in around 45 countries across multiple continents, solidifying its position as a large-cap company valued at over $10 billion [2]. Stock Performance - Zoetis' stock has faced significant challenges, declining 32.4% from its peak of $181.85 in December 2024, with a 21.6% drop in the last three months, contrasting with a 2.6% increase in the Dow Jones Industrial Average during the same period [3][4]. - Over the past 52 weeks, the stock has decreased by 30.6%, while the Dow has risen by 3.8%. Year-to-date in 2025, the stock has plummeted 24.6% compared to a 9.2% rise in the Dow [4]. Recent Financial Performance - In Q3 fiscal 2025, Zoetis reported revenue of $2.4 billion, which met analyst expectations, and adjusted EPS increased by 7.6% year-over-year to $1.70, exceeding consensus estimates [5]. - However, the company revised its full-year sales outlook down to $9.4 billion to $9.475 billion, reflecting a decline in demand for certain medicines and vaccines, particularly for pigs and chickens [6]. Market Sentiment - Following the earnings report, Zoetis' shares fell by 13.8% due to the weak outlook overshadowing solid results [5]. - On November 21, the stock rebounded by 5.3% after KeyBanc initiated coverage with a "Sector Weight" rating and set a price target of $175.04, indicating confidence in the company's potential to outperform as market conditions stabilize [7].